INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Schedule of components of income tax expense

The components of the income tax (benefit) expense are as follows (in thousands):

	Year Ended December 31,
	2018			2017			2016
Current income tax expense:
Federal	$	(115	)	$	—		$	197
State	192			6			179
Foreign	63			43			31
Total current expense	$	140		$	49		$	407
Deferred income tax (benefit) expense:
Federal	$	(1,877	)	$	9,736		$	3,545
State	(378		)	(872		)	387
Foreign	—			—			—
Total deferred (benefit) expense	(2,255		)	8,864			3,932
Total income tax (benefit) expense	$	(2,115	)	$	8,913		$	4,339

The components of income before income taxes were as follows (in thousands):

	Year Ended December 31,
	2018		2017		2016
Domestic	$	3,602	$	18,188	$	16,375
Foreign	205		181		129
	$	3,807	$	18,369	$	16,504

Temporary differences to the components of deferred tax assets

Temporary differences that give rise to the components of net deferred tax assets are as follows (in thousands):

	December 31,
	2018			2017
Inventory	$	1,249		$	1,321
Accrued compensation	110			103
Stock options	1,281			914
Research and development	476			442
Legal Settlement	1,678			—
Deferred revenue	3,305			2,002
Property and equipment	3,065			2,531
Net operating loss carryforwards – domestic	17,088			22,627
Foreign tax credit carryforward	38			54
Capital leases	(3,936		)	(3,757		)
Unremitted earnings for controlled foreign corporations	—			(50		)
Other	—			194
	24,354			26,381
Valuation allowance	(10,233		)	(14,504		)
Total net deferred tax assets	$	14,121		$	11,877

Effective income tax rate

The Company's income tax (benefit) expense relating to income (loss) for the periods presented differs from the amounts that would result from applying the federal statutory rate to that income (loss) as follows:

	Year Ended December 31,
	2018		2017		2016
Statutory federal tax rate	21	%	34	%	34	%
State income taxes, net of federal benefit	(8	)%	(5	)%	2	%
Non-controlling interest in Heska Imaging US, LLC	—	%	1	%	(3	)%
Non-temporary stock option benefit	(50	)%	(30	)%	(7	)%
Meals and entertainment permanent difference	1	%	—	%	—	%
GILTI permanent difference	1	%	—	%	—	%
Other permanent differences	1	%	1	%	(1	)%
Change in tax rate	—	%	32	%	—	%
Change in valuation allowance	—	%	16	%	—	%
Other deferred differences	(21	)%	—	%	—	%
Other	(1	)%	—	%	1	%
Effective income tax rate	(56	)%	49	%	26	%